February 28, 2013meelisBlog: Take advantage of Estonian tax system

Paying taxes is an obligation imposed for everyone by law. For government, taxes are such an important question that conducting a referendum about taxes is constituted as illegal, because then everyone could vote against their taxes and the state would lose its income.

So taxes cannot be avoided, but the tax systems vary a lot country by country. Estonian tax rates are not actually the lowest in international comparison, but Estonian tax system has some great benefits that make doing business here attractive.

The most important benefits of Estonian tax sytem is common non-progressive tax rate for both companies and individuals and the principle, according to which only distributed (not just earned) profits are taxable.

Estonian tax regime allows eternally to keep undistributed profits in the company tax free as pending for reinvestment. Doing business through a limited company, only amounts taken out from business as dividends or salary are taxable. Calculating payable taxes is cash based, tax system is very simple and understandable even for non-specialist. Tax liabilities are easily predictable.

We are glad to advise you regarding taxation in Estonia and help you with setting up a company and later book-keeping.